jun2010_genamericanannualrep.htm - Generated by SEC Publisher for SEC Filing

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number: 811-00041

---------------------------------------------

 

GENERAL AMERICAN INVESTORS COMPANY, INC.

 

--------------------------------------------------------------------------------

(Exact name of registrant as specified in charter)

 

100 Park Avenue, 35th Floor, New York, New York 10017

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(Address of principal executive offices) (Zip code)

 

Eugene S. Stark

General American Investors Company, Inc.

100 Park Avenue

35th Floor

New York, New York  10017

(Name and address of agent for service)

 

Copy to:

John E. Baumgardner, Jr., Esq.

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

 

 

Registrant's telephone number, including area code: 212-916-8400

 

Date of fiscal year end:  December 31

 

Date of reporting period: June 30, 2010

 

 

ITEM 1:  REPORTS TO STOCKHOLDERS


For the six months ended June 30, 2010, the net  The optimism that was apparent at the beginning of 
asset value per Common Share decreased  the year has faded as investors around the world now 
8.7%, while the investment return to our stock-  question the strength of economic recovery and 
holders decreased by 8.8%. By comparison, our  weigh the risk that sovereign defaults could pose to 
benchmark, the Standard & Poor’s 500 Stock Index  financial markets. The resulting flight to safety has 
(including income) decreased 6.7%. For the twelve  strengthened the dollar, elevated the price of precious 
months ended June 30, 2010, the return on the net  metals, and led to bond returns exceeding stock gains 
asset value per Common Share increased by 11.2%,  by the widest margin in a decade. 
and the return to our stockholders increased by 15.9%;   
these compare with an increase of 14.4% for the S&P  While the U.S. and Chinese economies may well be 
500. During both periods, the discount at which our  slowing, a moderate recovery, lasting at least several 
shares traded continued to fluctuate and on June 30,  more years, appears to be intact. Accommodative 
2010, it was 14.8%.  monetary and fiscal policies, unburdened at present 
  by the fear of inflation, together with adequate man- 
As detailed in the accompanying financial statements  ufacturing capacity, abundant labor, and cash rich 
(unaudited), as of June 30, 2010, the net assets  corporate balance sheets, support this conclusion. 
applicable to the Company’s Common Stock were   
$759,358,271 equal to $25.12 per Common Share.  Over time, with the restoration of confidence, our 
  portfolio companies, with their sound finances, sell- 
The decrease in net assets resulting from operations  ing at modest valuations, with dividend yields that in 
for the six months ended June 30, 2010 was  some cases approach bond returns, are likely to be 
$75,792,897. During this period, the net realized  rewarding. 
gain on investments sold was $5,268,358, and the   
decrease in net unrealized appreciation was  Information about the Company, including our 
$77,694,451. Net investment income for the  investment objectives, operating policies and 
three months was $2,289,185, and distributions to  procedures, investment results, record of dividend 
Preferred Stockholders amounted to $5,655,989.  and distribution payments, financial reports and press 
  releases, is on our website and has been updated 
During the six months, 1,192,429 shares of the  through June 30, 2010. It can be accessed on the 
Company’s Common Stock were repurchased for  internet at www.generalamericaninvestors.com. 
$28,643,454 at an average discount from net asset   
value of 14.5%.  By Order of the Board of Directors, 
The market rally of almost 80% from last year’s low,  GENERAL AMERICAN INVESTORS COMPANY, INC. 
without a meaningful correction, ended in the second  Spencer Davidson 
quarter. The recent weakness has facilitated the con-  Chairman of the Board 
tinuing repurchase of our common shares. Year-to-  President and Chief Executive Officer 
date, that total, almost 1.2 million, represents nearly   
4% of our shares outstanding at year-end.  July 21, 2010 

 



      Value 
Shares  COMMON STOCKS    (note 1a) 
AEROSPACE/DEFENSE (3.3%)     
215,000  Textron Inc.    $3,648,550 
325,000  United Technologies Corporation    21,095,750 
    (Cost $33,409,026)  24,744,300 
BUILDING AND REAL ESTATE (2.5%)     
1,946,880  CEMEX, S.A. de C.V. ADR* (a)  (Cost $23,385,068)  18,826,330 
COMMUNICATIONS AND INFORMATION SERVICES (5.9%)     
960,000  Cisco Systems, Inc. (a)(b)    20,457,600 
78,000  Leap Wireless International, Inc. (a)    1,012,440 
700,000  QUALCOMM Incorporated    22,988,000 
    (Cost $41,318,834)  44,458,040 
COMPUTER SOFTWARE AND SYSTEMS (8.4%)     
1,290,000  Dell Inc. (a)    15,557,400 
570,000  Microsoft Corporation    13,115,700 
168,100  NetEase.com, Inc. (a)    5,330,451 
55,000  Nintendo Co., Ltd.    16,373,856 
450,000  Teradata Corporation (a)    13,716,000 
    (Cost $72,782,465)  64,093,407 
CONSUMER PRODUCTS AND SERVICES (12.0%)     
350,000  Diageo plc ADR*    21,959,000 
300,000  Heineken N. V.    12,816,570 
466,100  Hewitt Associates, Inc. Class A (a)    16,061,806 
450,000  Nestle S.A.    21,877,321 
300,000  PepsiCo, Inc.    18,285,000 
    (Cost $77,737,735)  90,999,697 
ENVIRONMENTAL CONTROL (INCLUDING SERVICES) (6.3%)     
949,000  Republic Services, Inc.    28,213,770 
630,000  Waste Management, Inc.    19,712,700 
    (Cost $38,960,134)  47,926,470 
FINANCE AND INSURANCE (25.6%)     
BANKING (4.4%)       
500,000  Bond Street Holdings LLC (a) (c)    10,000,000 
375,000  JPMorgan Chase & Co. (a)    13,728,750 
115,000  M&T Bank Corporation    9,769,250 
    (Cost $25,840,044)  33,498,000 
INSURANCE (13.5%)       
315,000  Arch Capital Group Ltd. (a)    23,467,500 
260,000  Everest Re Group, Ltd.    18,387,200 
750,000  Fidelity National Financial, Inc.    9,742,500 
37,500  Forethought Financial Group, Inc. Class A with Warrants (a)(d)    7,500,000 
280,000  MetLife, Inc.    10,572,800 
275,000  PartnerRe Ltd.    19,288,500 
83,000  Transatlantic Holdings, Inc.    3,980,680 
200,000  The Travelers Companies, Inc.    9,850,000 
    (Cost $58,857,036)  102,789,180 
OTHER (7.7%)       
325,000  American Express Company    12,902,500 
110  Berkshire Hathaway Inc. Class A (a)    13,200,000 
1,666,667  Epoch Holding Corporation    20,450,004 
617,500  Nelnet, Inc.    11,905,400 
    (Cost $29,837,426)  58,457,904 
    (Cost $114,534,506)  194,745,084 

 




      Value 
Shares  COMMON STOCKS (continued)    (note 1a) 
HEALTH CARE / PHARMACEUTICALS (6.9%)     
382,100  Cephalon, Inc. (a)    $21,684,175 
529,900  Cytokinetics, Incorporated (a)    1,255,863 
544,500  Gilead Sciences, Inc. (a)    18,665,460 
755,808  Pfizer Inc.    10,777,822 
195,344  Poniard Pharmaceuticals, Inc. (a)    117,206 
    (Cost $60,480,764)  52,500,526 
MACHINERY AND EQUIPMENT (2.7%)     
1,200,000  ABB Ltd. ADR*  (Cost $13,364,456)  20,736,000 
METALS (1.9%)       
264,200  Alpha Natural Resources, Inc. (a)    8,948,454 
150,000  Nucor Corporation    5,742,000 
MISCELLANEOUS (6.3%)     
  Other (e)  (Cost $50,932,073)  47,608,430 
OIL AND NATURAL GAS (INCLUDING SERVICES) (10.6%)     
295,478  Apache Corporation    24,876,293 
130,062  Devon Energy Corporation    7,923,377 
800,000  Halliburton Company    19,640,000 
2,150,000  Weatherford International Ltd. (a)    28,251,000 
    (Cost $66,725,403)  80,690,670 
RETAIL TRADE (17.8%)       
575,000  Costco Wholesale Corporation    31,527,250 
400,000  J.C. Penney Company, Inc.    8,592,000 
1,632,400  The TJX Companies, Inc.    68,479,180 
550,000  Wal-Mart Stores, Inc.    26,438,500 
    (Cost $56,251,235)  135,036,930 
SEMICONDUCTORS (2.5%)     
700,000  ASML Holding N.V.  (Cost $17,340,380)  19,229,000 
TECHNOLOGY (3.6%)       
750,000  International Game Technology    11,775,000 
1,900,000  Xerox Corporation    15,276,000 
    (Cost $34,368,474)  27,051,000 
TRANSPORTATION (0.9%)     
236,100  Alexander & Baldwin, Inc.  (Cost $11,005,032)  7,031,058 
          TOTAL COMMON STOCKS (117.2%)  (Cost $732,907,604)  890,367,396 
  WARRANT     
BANKING (0.3%)       
155,000  JPMorgan Chase & Co.     
  Expires 10/28/2018 (a)  (Cost $1,982,378)  1,959,200 
Principal Amount  CORPORATE DEBT (f)     
CONSUMER PRODUCTS AND SERVICES (1.3%)     
$9,600,000  Smithfield Foods, Inc.     
 

7.75% due 5/15/2013 

 (Cost $7,940,479)  9,696,000 
TECHNOLOGY (1.2%)       
$10,000,000  VeriFone Holdings, Inc.     
  1.375% due 6/15/2012  (Cost $6,494,669)  9,250,000 
          TOTAL CORPORATE DEBT (2.5%)  (Cost $14,435,148)  18,946,000 

 




      Value 
Shares  SHORT-TERM SECURITY AND OTHER ASSETS    (note 1a) 
41,257,568  SSgA Prime Money Market Fund (5.4%)  (Cost $41,257,568)  $41,257,568 
TOTAL INVESTMENTS (g) (125.4%)  (Cost $790,582,698)  952,530,164 
Liabilities in excess of cash, receivables and other assets (-0.4%)    (3,054,718) 
PREFERRED STOCK (-25.0%)    (190,117,175) 
NET ASSETS APPLICABLE TO COMMON STOCK (100%)    $759,358,271 

 

* ADR - American Depository Receipt
(a)      Non-income producing security.
(b)      165,500 shares held by custodian in a segregated custodial account as collateral for written options.
(c)      Level 3 fair value measurement, restricted security acquired 11/4/09, aggregate cost $10,000,000, unit cost and fair value is $20 per share, note 2. Fair value is based upon dated bid and transaction prices provided via the NASDAQ OMX PORTAL Alliance trading and transfer system for privately placed equity securities traded in the over-the-counter market among quali- fied investors and an evaluation of book value per share.
(d)      Level 3 fair value measurement, restricted security acquired 11/3/09, aggregate cost $7,500,000, unit cost and fair value is $200 per share, note 2. Fair valuation is based upon a market approach using valuation metrics (market price-earnings and market price-book value multiples), and changes therein, relative to a peer group of companies established by the underwriters.
(e)      Securities which have been held for less than one year, not previously disclosed, and not restricted.
(f)      Level 2 fair value measurement, note 2. Fair value is based upon the most current bid price provided by independent dealers.
(g)      At June 30, 2010: the cost of investments for Federal income tax purposes was the same as the cost for financial reporting purposes, aggregate gross unrealized appreciation was $245,580,447, aggregate gross unrealized depreciation was $83,632,981, and net unrealized appreciation was $161,947,466.

Contracts      Value 
(100 shares each)  COMMON STOCK/EXPIRATION DATE/EXERCISE PRICE  (note 1a) 
     COMMUNICATIONS AND INFORMATION SERVICES   
350  Cisco Systems, Inc./July 10/$28.00  $2,610 
1,305  Cisco Systems, Inc./July 10/$27.00  350 
  TOTAL CALL OPTIONS  (PREMIUMS DEPOSITED WITH BROKERS $168,500)  $2,960 
(see notes to financial statements)     

 




  SHARES  SHARES 
INCREASES  AMOUNT TRANSACTED  AMOUNT HELD 
NEW POSITIONS     
JPMorgan Chase & Co.  375,000  375,000 (b) 
JPMorgan Chase & Co., Warrants expiring 10/28/2018  155,000  155,000      
ADDITIONS     
Alpha Natural Resources, Inc.    10,000  264,200    

Cephalon, Inc. 

 35,000  382,100     
Devon Energy Corporation  30,062  130,062     
Everest Re Group, Ltd.  10,000  260,000     
Gilead Sciences, Inc.  425,000  544,500     

PepsiCo, Inc. 

 15,000  300,000     
Pfizer Inc.  100,000  755,808     
DECREASES     
ELIMINATIONS     
McDermott International, Inc.  325,000  —     
XTO Energy Inc.  200,000  —     
REDUCTIONS     
Heineken N.V.  25,000  300,000     
M&T Bank Corporation  25,000  115,000     
Nelnet, Inc.  17,500  617,500     
Nintendo Co., Ltd.  12,100  55,000     
The TJX Companies, Inc.  142,600  1,632,400     

 

(a)      Common shares unless otherwise noted; excludes transactions in Common Stocks - Miscellaneous - Other.
(b)      Shares purchased in prior period and previously carried under Common Stocks - Miscellaneous - Other.

The diversification of the Company’s net assets applicable to its Common Stock by industry group as of June 30, 2010 is shown in the following table 
PERCENT
INDUSTRY CATEGORY  COST(000)  VALUE(000)   COMMON NET ASSETS* 
Finance and Insurance       
   Banking  $27,822  $35,457  4.7% 
   Insurance  58,857  102,789  13.5 
   Other  29,838  58,458  7.7 
  116,517  196,704  25.9 
Retail Trade  56,251  135,037  17.8 
Consumer Products and Services  85,678  100,696  13.3 
Oil and Natural Gas (Including Services)  66,725  80,691  10.6 
Computer Software and Systems  72,783  64,093  8.4 
Health Care/Pharmaceuticals  60,481  52,501  6.9 
Environmental Control (Including Services)  38,960  47,927  6.3 
Miscellaneous**  50,932  47,608  6.3 
Communications and Information Services  41,319  44,458  5.9 
Technology  40,863  36,301  4.8 
Aerospace/Defense  33,409  24,744  3.3 
Machinery and Equipment  13,365  20,736  2.7 
Semiconductors  17,340  19,229  2.5 
Building and Real Estate  23,385  18,826  2.5 
Metals  20,312  14,690  1.9 
Transportation  11,005  7,031  0.9 
  749,325  911,272  120.0 
Short-Term Securities  41,258  41,258  5.4 
   Total Investments  $790,583  952,530  125.4 
Other Assets and Liabilities - Net    (3,055)  (0.4) 
Preferred Stock    (190,117)  (25.0) 
Net Assets Applicable to Common Stock    $759,358  100.0% 
* Net Assets applicable to the Company’s Common Stock.     
** Securities which have been held for less than one year, not previously disclosed, and not restricted.   
(see notes to financial statements)       

 




ASSETS     
INVESTMENTS, AT VALUE (NOTE 1a)     
   Common stocks (cost $732,907,604)    $890,367,396 
   Warrant (cost $1,982,378)    1,959,200 
   Corporate debt (cost $14,435,148)    18,946,000 
   Money market fund (cost $41,257,568)    41,257,568 
          Total investments (cost $790,582,698)    952,530,164 
RECEIVABLES AND OTHER ASSETS     
   Receivable for securities sold  $1,067,214   
   Dividends, interest and other receivables  1,281,105   
   Qualified pension plan asset, net excess funded (note 7)  3,145,316   
   Prepaid expenses and other assets  2,697,399  8,191,034 
TOTAL ASSETS    960,721,198 
LIABILITIES     
   Payable for securities purchased  1,931,153   
   Accrued preferred stock dividend not yet declared  219,958   
   Outstanding options written, at value (premiums deposited with brokers $168,500)(note 1a)  2,960   
   Accrued supplemental pension plan liability (note 7)  3,397,911   
   Accrued supplemental thrift plan liability (note 7)  2,544,433   
   Accrued expenses and other liabilities  3,149,337   
TOTAL LIABILITIES    11,245,752 
5.95% CUMULATIVE PREFERRED STOCK, SERIES B -     
   7,604,687 shares at a liquidation value of $25 per share (note 5)    190,117,175 
NET ASSETS APPLICABLE TO COMMON STOCK - 30,232,786 shares (note 5)    $759,358,271 
NET ASSET VALUE PER COMMON SHARE    $25.12 
NET ASSETS APPLICABLE TO COMMON STOCK     
   Common Stock, 30,232,786 shares at par value (note 5)  $30,232,786   
   Additional paid-in capital (note 5)  568,202,126   
   Undistributed net investment income  4,811,847   
   Undistributed realized gain on investments  5,268,358   
   Accumulated other comprehensive income (note 7)  (5,393,908)   
   Unallocated distributions on Preferred Stock  (5,875,944)   
   Unrealized appreciation on investments and options  162,113,006   
NET ASSETS APPLICABLE TO COMMON STOCK    $759,358,271 
(see notes to financial statements)     

 



 
INCOME       
   Dividends (net of foreign withholding taxes of $464,985)  $7,307,716   
   Interest  1,602,490  $8,910,206 
EXPENSES       
   Investment research  3,741,538   
   Administration and operations  1,451,553   
   Office space and general  839,171   
   Auditing and legal fees  176,000   
   Directors’ fees and expenses  135,375   
   Miscellaneous taxes  107,034   
   Stockholders’ meeting and reports  85,350   
   Transfer agent, custodian and registrar fees and expenses  85,000  6,621,021 
NET INVESTMENT INCOME    2,289,185 
REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1, 3 AND 4)    
   Net realized gain on investments:     
          Securities transactions (long-term, except for $1,457,216)  5,222,135   
          Written option transactions  46,223   
   Net decrease in unrealized appreciation on investments:  5,268,358   
          Securities  (77,821,267)   
          Written options  126,816   
  (77,694,451)   
NET LOSS ON INVESTMENTS    (72,426,093) 
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS    (5,655,989) 
DECREASE IN NET ASSETS RESULTING FROM OPERATIONS    ($75,792,897) 

 


  Six Months Ended  Year Ended 
OPERATIONS  June 30, 2010     December 31, 2009 
   Net investment income  $2,289,185  $3,400,143 
   Net realized gain on investments  5,268,358  15,219,812 
   Net increase (decrease) in unrealized appreciation  (77,694,451)  204,253,481 
  (70,136,908)  222,873,436 
   Distributions to Preferred Stockholders:     
          From net investment income  —  (3,389,107) 
          From short-term capital gains  —  (1,654,369) 
          From long-term capital gains  —  (6,107,907) 
          Return of capital  —  (333,668) 
          Unallocated distributions  (5,655,989)  11,047 
          Decrease in net assets from Preferred distributions  (5,655,989)  (11,474,004) 
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  (75,792,897)  211,399,432 
OTHER COMPREHENSIVE INCOME (Adjustment to apply FAS 158; Note 7)  (528,750)  1,911,451 
DISTRIBUTIONS TO COMMON STOCKHOLDERS       
   From net investment income  —  (3,248,669) 
   From short-term capital gains  —  (1,585,814) 
   From long-term capital gains  —  (5,854,806) 
   Return of capital  —  (319,841) 
DECREASE IN NET ASSETS FROM COMMON DISTRIBUTIONS  —  (11,009,130) 
CAPITAL SHARE TRANSACTIONS (NOTE 5)       
   Value of Common Shares issued in payment of dividends and distributions  —  6,430,088 
   Cost of Common Shares purchased  (28,643,454)  (19,553,159) 
   Benefit to Common Shareholders resulting from Preferred Shares purchased  —  546,889 
DECREASE IN NET ASSETS - CAPITAL TRANSACTIONS  (28,643,454)  (12,576,182) 
NET INCREASE (DECREASE) IN NET ASSETS  (104,965,101)  189,725,571 
NET ASSETS APPLICABLE TO COMMON STOCK       
BEGINNING OF PERIOD  864,323,372  674,597,801 
END OF PERIOD (including undistributed net investment income of $4,811,847 and     
   $2,522,662, respectively)  $759,358,271  $864,323,372 
(see notes to financial statements)     

 




  The following table shows per share operating performance data, total investment return, ratios and supplemental data for the six
months ended June 30, 2010 and for each year in the five-year period ended December 31, 2009. This information has been derived
from information contained in the financial statements and market price data for the Company’s shares.

  Six Months           
  Ended           
  June 30, 2010      Year Ended December 31,     
  (Unaudited)  2009  2008  2007  2006  2005 
PER SHARE OPERATING PERFORMANCE             
   Net asset value, beginning of period  $27.50  $21.09  $38.10  $40.54  $39.00  $35.49 
      Net investment income  .08  .11  .42  .31  .34  .19 
      Net gain (loss) on investments -             
         realized and unrealized  (2.25)  6.94  (16.15)  3.39  4.72  5.85 
      Other comprehensive income  (.02)  .07  (.25)  .02  .03  — 
   Distributions on Preferred Stock:             
      Dividends from net investment income  —  (.11)  (.11)  (.02)  (.04)  (.03) 
      Distributions from net short-term capital gains  —  (.05)  —  (.03)  (.01)  (.08) 
      Distributions from net long-term capital gains  —  (.19)  (.27)  (.36)  (.36)  (.30) 
      Distributions from return of capital  —  (.01)  —  —  —  — 
      Unallocated  (.19)  —  —  —  —  — 
  (.19)  (.36)  (.38)  (.41)  (.41)  (.41) 
   Total from investment operations  (2.38)  6.76  (16.36)  3.31  4.68  5.63 
   Distributions on Common Stock:             
      Dividends from net investment income  —  (.10)  (.19)  (.33)  (.29)  (.15) 
      Distributions from net short-term capital gains  —  (.05)  —  (.38)  (.04)  (.44) 
      Distributions from net long-term capital gains  —  (.19)  (.46)  (5.04)  (2.81)  (1.53) 
      Distributions from return of capital  —  (.01)  —  —  —  — 
  —  (.35)  (.65)  (5.75)  (3.14)  (2.12) 
   Net asset value, end of period  $25.12  $27.50  $21.09  $38.10  $40.54  $39.00 
   Per share market value, end of period  $21.40  $23.46  $17.40  $34.70  $37.12  $34.54 
TOTAL INVESTMENT RETURN - Stockholder             
        return, based on market price per share  (8.78)%*  36.86%  (48.20)%  8.72%  16.78%  17.40% 
RATIOS AND SUPPLEMENTAL DATA             
   Net assets applicable to Common Stock,             
      end of period (000’s omitted)  $759,358 $864,232 $674,598 $1,202,923 $1,199,453 $1,132,942
   Ratio of expenses to average net assets             
      applicable to Common Stock  1.57%**  1.93%  0.87%  1.11%  1.06%  1.25% 
   Ratio of net income to average net assets             
     applicable to Common Stock  0.54%**  0.46%  1.31%  0.78%  0.86%  0.51% 
   Portfolio turnover rate  8.98%*  24.95%  25.52%  31.91%  19.10%  20.41% 
PREFERRED STOCK             
   Liquidation value, end of period (000’s omitted)  $190,117 $190,117 $199,617 $200,000 $200,000 $200,000
   Asset coverage  499%  555%  438%  701%  700%  666% 
   Liquidation preference per share  $25.00  $25.00  $25.00  $25.00  $25.00  $25.00 
   Market value per share  $25.07  $24.53  $21.90  $21.99  $24.44  $24.07 
*Not annualized             
  ** Annualized

 




1. SIGNIFICANT ACCOUNTING POLICIES - General American Investors Company, Inc. (the “Company”), established in 1927, is registered
under the Investment Company Act of 1940 as a closed-end, diversified management investment company. It is internally managed by
its officers under the direction of the Board of Directors.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires man-
agement to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.

a. SECURITY VALUATION Equity securities traded on a national securities exchange are valued at the last reported sales price on the
last business day of the period. Equity securities reported on the NASDAQ national market are valued at the official closing price on
that day. Listed and NASDAQ equity securities for which no sales are reported on that day and other securities traded in the over-
the-counter market are valued at the last bid price (asked price for options written) on the valuation date. Equity securities traded pri-
marily in foreign markets are valued at the closing price of such securities on their respective exchanges or markets. Corporate debt
securities, domestic and foreign, are generally traded in the over-the-counter market rather than on a securities exchange. The
Company utilizes the latest bid prices provided by independent dealers and information with respect to transactions in such securi-
ties to determine current market value. If, after the close of foreign markets, conditions change significantly, the price of certain for-
eign securities may be adjusted to reflect fair value as of the time of the valuation of the portfolio. Investments in money market funds
are valued at their net asset value. Special holdings (restricted securities) and other securities for which quotations are not readily
available are valued at fair value determined in good faith pursuant to procedures established by and under the general supervision
of the Board of Directors.

b. OPTIONS The Company may purchase and write (sell) put and call options. The Company purchases put options or writes call
options to hedge the value of portfolio investments while it purchases call options and writes put options to obtain equity market
exposure. The risk associated with purchasing an option is that the Company pays a premium whether or not the option is exercised.
Additionally, the Company bears the risk of loss of the premium and a change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same manner as portfolio securities. Premiums received
from writing options are reported as a liability on the Statement of Assets and Liabilities. Those that expire unexercised are treated
by the Company on the expiration date as realized gains on written option transactions in the Statement of Operations. The differ-
ence between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commis-
sions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a real-
ized loss on written option transactions in the Statement of Operations. If a call option is exercised, the premium is added to the pro-
ceeds from the sale of the underlying security in determining whether the Company has realized a gain or loss on investments in the
Statement of Operations. If a put option is exercised, the premium reduces the cost basis for the securities purchased by the Company
and is parenthetically disclosed under cost of investments on the Statement of Assets and Liabilities. The Company as writer of an
option bears the market risk of an unfavorable change in the price of the security underlying the written option. See Note 4 for writ-
ten option activity.

c. SECURITY TRANSACTIONS AND INVESTMENT INCOME Security transactions are recorded as of the trade date. Dividend income and
distributions to stockholders are recorded as of the ex-dividend dates. Interest income, adjusted for amortization of discount and pre-
mium on investments, is earned from settlement date and is recognized on the accrual basis. Cost of short-term investments repre-
sents amortized cost.

d. FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such currencies versus U.S. dollars on the date of valuation.
Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the
exchange rate in effect on the transaction date. Events may impact the availability or reliability of foreign exchange rates used to
convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using proce-
dures established and approved by the Company’s Board of Directors. The Company does not separately report the effect of changes
in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized
gain or loss from investments on the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade
and settlement dates on security transactions and the difference between the recorded amounts of dividends, interest, and foreign
withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains
and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in secu-
rities held at the end of the reporting period.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S.
companies as a result of, among other factors, the possibility of political or economic instability or the level of governmental super-
vision and regulation of foreign securities markets.

e. DIVIDENDS AND DISTRIBUTIONS The Company expects to pay dividends of net investment income and distributions of net realized
capital and currency gains, if any, annually to common shareholders and quarterly to preferred shareholders. Dividends and distri-
butions to common and preferred shareholders, which are determined in accordance with Federal income tax regulations are record-
ed on the ex-dividend date. Distributions for tax and book purposes are substantially the same. Permanent book/tax differences relat-
ing to income and gains are reclassified to paid-in capital as they arise.

f. FEDERAL INCOME TAXES The Company’s policy is to fulfill the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all taxable income to its stockholders. Accordingly, no provision for Federal
income taxes is required. As of and during the period ended June 30, 2010, the Company did not have any liabilities for any unrec-
ognized tax positions. The Company recognizes interest and penalties, if any, related to unrecognized tax positions as income tax
expense in the Statement of Operations. During the period, the Company did not incur any interest or penalties.

g. CONTINGENT LIABILITIES Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and
an amount is reasonably estimable. Management evaluates whether there are incremental legal or other costs directly associated with
the ultimate resolution of a matter that are reasonably estimable and, if so, they are included in the accrual.

h. INDEMNIFICATIONS In the ordinary course of business, the Company enters into contracts that contain a variety of indemnifications.
The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or loss-
es pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote.




  2. FAIR VALUE MEASUREMENTS - Various data inputs are used in determining the value of the Company’s investments. These inputs are
summarized in a hierarchy consisting of the three broad levels listed below:

Level 1 - quoted prices in active markets for identical securities (including money market funds which are valued using amortized cost
and which transact at net asset value, typically $1 per share),

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.), and

Level 3 - significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those
securities. The following is a summary of the inputs used to value the Company’s net assets as of June 30, 2010:

Assets  Level 1  Level 2  Level 3  Total 
Common stocks  $872,867,396  —  $17,500,000  $890,367,396 
Warrant  1,959,200  —  —  1,959,200 
Corporate debt  —  18,946,000  —  18,946,000 
Money market fund  41,257,568  —  —  41,257,568 
     Total  $916,084,164  $18,946,000  $17,500,000  $952,530,164 
Liabilities         
Options written  ($2,960)  —  —  ($2,960) 

 

The aggregate value of Level 2 and 3 portfolio investments changed during the six months ended June 30, 2010 as follows:

  Level 2  Level 3 
Fair value at December 31, 2009  $29,357,226  $16,850,000 
Cost basis of investments sold  (7,127,127)  — 
Net realized gain on investments sold  (4,084,769)  — 
Net change in unrealized appreciation on investments  800,670  650,000 
Fair value at June 30, 2010  $18,946,000  $17,500,000 

 

3. PURCHASES AND SALES OF SECURITIES - Purchases and sales of securities (other than short-term securities and options) for the six
months ended June 30, 2010 amounted to $87,855,462 and $108,757,880, on long transactions, respectively.
4. WRITTEN OPTIONS - Transactions in written covered call and collateralized put options during the six months ended June 30, 2010
were as follows:

  Covered Call  Collateralized Put 
  Contracts  Premiums  Contracts  Premiums 
Options outstanding, December 31, 2009  —  —  250  $46,223 
Options written  1,655  $168,500  —  — 
Options expired  —  —  250  (46,223) 
Options outstanding, June 30, 2010  1,655  $168,500  0  $0 

 

  5. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS - The authorized capital stock of the Company consists of 50,000,000 shares of
Common Stock, $1.00 par value, and 10,000,000 shares of Preferred Stock, $1.00 par value. With respect to the Common Stock,
30,232,786 shares were issued and outstanding; 8,000,000 Preferred Shares were originally issued and 7,604,687 were outstanding on
June 30, 2010.

On September 24, 2003, the Company issued and sold 8,000,000 shares of its 5.95% Cumulative Preferred Stock, Series B in an under-
written offering. The Preferred Shares were noncallable for the 5 year period ended September 24, 2008 and have a liquidation prefer-
ence of $25.00 per share plus accumulated and unpaid dividends to the date of redemption. On December 10, 2008, the Board of
Directors authorized the repurchase of 1 million Preferred Shares in the open market at prices below $25.00 per share. A total of 395,313
Preferred Shares have been repurchased at an aggregate cost of $9,276,538, an average cost per share of $23.47, through December 31,
2009; no Preferred Shares were repurchased during the six months ended June 30, 2010. The average discount of $1.53 per Preferred
Share, $606,287 in the aggregate, was credited to additional paid-in capital of Common Stock.

The Company is required to allocate distributions from long-term capital gains and other types of income proportionately among hold-
ers of shares of Common Stock and Preferred Stock. To the extent that dividends on the shares of Preferred Stock are not paid from
long-term capital gains, they will be paid from ordinary income or net short-term capital gains or will represent a return of capital.

Under the Investment Company Act of 1940, the Company is required to maintain an asset coverage of at least 200% of the Preferred
Stock. In addition, pursuant to Moody’s Investor Service, Inc. Rating Agency Guidelines, the Company is required to maintain a cer-
tain discounted asset coverage for its portfolio that equals or exceeds a Basic Maintenance Amount. The Company has met these
requirements since the issuance of the Preferred Stock. If the Company fails to meet these requirements in the future and does not cure
such failure, the Company may be required to redeem, in whole or in part, shares of Preferred Stock at a redemption price of $25.00 per
share plus accumulated and unpaid dividends. In addition, failure to meet the foregoing asset coverage requirements could restrict the
Company’s ability to pay dividends on shares of Common Stock and could lead to sales of portfolio securities at inopportune times.

The holders of Preferred Stock have voting rights equivalent to those of the holders of Common Stock (one vote per share) and, gen-
erally, vote together with the holders of Common Stock as a single class.
Holders of Preferred Stock elect two members of the Company’s Board of Directors and the holders of Preferred and Common Stock,
voting as a single class, elect the remaining directors. If the Company fails to pay dividends on the Preferred Stock in an amount equal
to two full years’ dividends, the holders of Preferred Stock will have the right to elect a majority of the directors. In addition, the
Investment Company Act of 1940 requires that approval of the holders of a majority of any outstanding Preferred Shares,
voting separately as a class, would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Stock
and (b) take any action requiring a vote of security holders, including, among other things, changes in the Company’s subclassification
as a closed-end investment company or changes in its fundamental investment policies.




  5. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS - (Continued from bottom of previous page.)

The Company presents its Preferred Stock, for which its redemption is outside of the Company’s control, outside of the net assets appli-
cable to Common Stock in the Statement of Assets and Liabilities.

Transactions in Common Stock during the six months ended June 30, 2010 and the year ended December 31, 2009 were as follows:

  Shares Amount 
  2010    2009  2010  2009 
Increase in par value of shares issued in payment of dividends and           
distributions (includes 281,281 shares issued from treasury)  —    281,281  —  $281,281 
Increase in paid-in capital        —  6,148,807 
Total increase        —  6,430,088 
Decrease in par value of shares purchased (average discount from           
NAV of 14.5% and13.6%, respectively)  1,192,429    836,938  ($1,192,429)  (836,938) 
Decrease in paid-in capital        (27,451,025)  (18,716,221) 
Total decrease        (28,643,454)  (19,553,159) 
Net decrease        ($28,643,454)  ($13,123,071) 

 

  At June 30, 2010, the Company held in its treasury 1,748,086 shares of Common Stock with an aggregate cost in the amount of
$41,997,676.

6. OFFICERS’ COMPENSATION - The aggregate compensation paid and accrued by the Company pertaining to the six months ended June
30, 2010 to its officers (identified on back cover) amounted to $3,512,000.

7. BENEFIT PLANS - The Company has funded (qualified) and unfunded (supplemental) noncontributory defined benefit pension plans
that cover its employees. The plans provide defined benefits based on years of service and final average salary with an offset for a por-
tion of social security covered compensation. The components of the net periodic benefit cost (income) of the plans for the six months
ended June 30, 2010 were:

Service cost  $166,351 
Interest cost  329,965 
Expected return on plan assets  (473,025) 
Amortization of prior service cost  19,170 
Recognized net actuarial loss  84,662 
Net periodic benefit cost  $127,123 

 

  The Company also has funded (qualified) and unfunded (supplemental) defined contribution thrift plans that are available to its employ-
ees. The aggregate cost of such plans for the six months ended June 30, 2010 was $214,426. The qualified thrift plan acquired 15,800
shares of the Company’s Common Stock during the six months ended June 30, 2010 and held 532,486 shares of the Company’s Common
Stock at June 30, 2010.
The Company recognizes the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in the
Statement of Assets and Liabilities and recognizes changes in funded status in the year in which the changes occur through other com-
prehensive income.

8. OPERATING LEASE COMMITMENT - In September 2007, the Company entered into an operating lease agreement for office space which
expires in February 2018 and provided for future rental payments in the aggregate amount of approximately $10,755,000, net of con-
struction credits. The lease agreement contains clauses whereby the Company receives free rent for a specified number of months and
credit towards construction of office improvements, and incurs escalations annually relating to operating costs and real property taxes
and to annual rent charges beginning in February 2013. The Company has the option to renew the lease after February 2018 for five
years at market rates. Rental expense approximated $553,500 for the six months ended June 30, 2010. Minimum rental commitments
under the operating lease are approximately $1,075,000 per annum in 2011 through 2012, $1,183,000 in 2013 through 2017, and
$99,000 in 2018.

9. LITIGATION - The Company is subject to a legal action arising from a construction worker’s personal injury that is covered under
the terms of its insurance policies. Defense and legal costs are being funded by the insurer; damages are unspecified at this time. No
liabilities or expenses have been incurred by the Company to date.


  Purchases of the Company’s Common Stock as set forth in Note 5 on page 10, may be made at such times, at such prices, in such amounts and in
such manner as the Board of Directors may deem advisable.
The policies and procedures used by the Company to determine how to vote proxies relating to portfolio securities and the Company’s proxy voting
record for the twelve-month period ended June 30, 2010 are available: (1) without charge, upon request, by calling us at our toll-free telephone num-
ber (1-800-436-8401), (2) on the Company’s website at www.generalamericaninvestors.com and (3) on the Securities and Exchange Commission’s
website at www.sec.gov.

In addition to distributing financial statements as of the end of each quarter, General American Investors files a Quarterly Schedule of Portfolio
Holdings (Form N-Q) with the Securities and Exchange Commission (“SEC”) as of the end of the first and third calendar quarters. The Company’s
Forms N-Q are available at www.generalamericaninvestors.com and on the SEC’s website: www.sec.gov. Also, Forms N-Q may be reviewed and
copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the SEC’s Public Reference Room may be obtained
by calling 1-800-SEC-0330. A copy of the Company’s Form N-Q may also be obtained by calling us at 1-800-436-8401.

On May 12, 2010, the Company submitted a CEO annual certification to the New York Stock Exchange (“NYSE”) on which the Company’s prin-
cipal executive officer certified that he was not aware, as of that date, of any violation by the Company of the NYSE’s Corporate Governance list-
ing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the Company’s principal executive
and principal financial officer made quarterly certifications, included in filings with the SEC on Forms N-CSR and N-Q relating to, among other
things, the Company’s disclosure controls and procedures and internal control over financial reporting, as applicable.



DIRECTORS
Spencer Davidson, Chairman
Sidney R. Knafel, Lead Independent Director
     Arthur G. Altschul, Jr. Betsy F. Gotbaum
     Rodney B. Berens Daniel M. Neidich
     Lewis B. Cullman D. Ellen Shuman
     Gerald M. Edelman Raymond S. Troubh
     John D. Gordan, III

 

OFFICERS 
     Spencer Davidson, President & Chief Executive Officer 
     Andrew V. Vindigni, Senior Vice-President 
     Sally A. Lynch, Vice-President 
     Michael W. Robinson, Vice-President 
     Eugene S. Stark, Vice-President, Administration & 
             Chief Compliance Officer 
     Jesse R. Stuart, Vice-President 
     Diane G. Radosti, Treasurer 
     Carole Anne Clementi, Secretary 
     Craig A. Grassi, Assistant Vice-President 
     Maureen E. LoBello, Assistant Secretary 

 

SERVICE COMPANIES
COUNSEL  TRANSFER AGENT AND REGISTRAR 
Sullivan & Cromwell LLP  American Stock Transfer & Trust 
INDEPENDENT AUDITORS        Company, LLC 
Ernst & Young LLP  59 Maiden Lane 
  New York, NY 10038 
CUSTODIAN  1-800-413-5499 
State Street Bank and  www.amstock.com 
     Trust Company   

 

  REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
GENERAL AMERICAN INVESTORS COMPANY, INC.

We have reviewed the accompanying statement of assets and liabilities of
General American Investors Company, Inc., including the statement of investments,
as of June 30, 2010, and the related statements of operations and changes in net
assets and financial highlights for the six-month period ended June 30, 2010. These
financial statements and financial highlights are the responsibility of the Company’s
management.

We conducted our review in accordance with the standards of the Public
Company Accounting Oversight Board (United States). A review of interim finan-
cial information consists principally of applying analytical procedures to financial
data, and making inquiries of persons responsible for financial and accounting mat-
ters. It is substantially less in scope than an audit in accordance with the standards
of the Public Company Accounting Oversight Board, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the interim financial statements referred to above for them to be in con-
formity with accounting principles generally accepted in the United States.

We have previously audited, in accordance with the standards of the Public
Company Accounting Oversight Board, the statement of changes in net assets for
the year ended December 31, 2009 and financial highlights for each of the five years
in the period then ended and in our report, dated February 3, 2010 we expressed an
unqualified opinion on such financial statements and financial highlights.

New York, New York                                               ERNST & YOUNG LLP
August 2, 2010

                   A Closed-End Investment Company
              listed on the New York Stock Exchange

                             100 PARK AVENUE
                          NEW YORK • NY 10017
                      212-916-8400 • 1-800-436-8401
                E-mail: InvestorRelations@gainv.com
                www.generalamericaninvestors.com

 

ITEM 2. CODE OF ETHICS.

 

Not applicable to this semi-annual report.

 

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

 

Not applicable to this semi-annual report.

 

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 

Not applicable to this semi-annual report.

 

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

 

Not applicable to this semi-annual report.

 

ITEM 6. SCHEDULE OF INVESTMENTS

 

The schedule of investments in securities of unaffiliated issuers is included as

part of the report to stockholders filed under Item 1 of this form.

 

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END

MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable to this semi-annual report.

 

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable to this semi-annual report.

 

 

 

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

 

(a) General American Investors Company, Inc. Common Stock (GAM)

 

Period

(a) Total Number

(b) Average Price

(c) Total Number of Shares

(d) Maximum Number (or Approximate

2010

of shares (or Units)

Paid per Share

(or Units) Purchased as Part

Dollar Value) of Shares (or Units)

 

Purchased

(or Unit)

of Publicly Announced Plans

that May Yet Be Purchased Under

 

 

 

or Programs

the Plans or Programs

01/01-01/31

180,399

23.7461

180,399

1,133,216

02/01-02/28

124,458

22.9049

124,458

1,008,758

03/01-03/31

203,146

24.5529

203,146

805,612

04/01-04/30

240,108

25.5969

240,108

565,504

05/01-05/31

302,994

23.6820

302,994

262,510

06/01-06/30

141,324

22.6404

141,324

121,186

 

 

 

 

 

Total for year

1,192,429

 

1,192,429

 

 

 

 

 

 

 

Note-

On January 20, 2010, the Board of Directors authorized and the registrant announced the repurchase

 

of up to 800,000 shares of the registrant’s common stock when the shares are trading at a discount

 

from the underlying net asset value of at least 8%. This represents a continuation of the repurchase program

 

which began in March 1995. As of the beginning of the period, January 1, 2010, there were 513,615

 

shares available for repurchase under such authorization.  As of the end of the period, June 30, 2010,

 

there were 121,186 shares available for repurchase under this program.

 

 

 

 

(b) General American Investors Company, Inc. Preferred Stock (GAMpB)

 

Period

(a) Total Number

(b) Average Price

(c) Total Number of Shares

(d) Maximum Number (or Approximate

2010

of shares (or Units)

Paid per Share

(or Units) Purchased as Part

Dollar Value) of Shares (or Units)

 

Purchased

(or Unit)

of Publicly Announced Plans

that May Yet Be Purchased Under

 

 

 

or Programs

the Plans or Programs

01/01-01/31

-

 

-

604,687

02/01-02/28

-

 

-

604,687

03/01-03/31

-

 

-

604,687

04/01-04/30

-

 

-

604,687

05/01-05/31

-

 

-

604,687

06/01-06/30

-

 

-

604,687

 

 

 

 

 

Total

0

 

0

 

 

 

 

 

 

 

Note-

The Board of Directors has authorized the repurchase of the registrant's preferred stock when the shares are

 

trading at a price not in excess of $25.00 per share. This represents a repurchase program which began on

 

December 10, 2008. As of the beginning of the period, January 1, 2010, there were 604,687 shares available

 

for repurchase under such authorization.  As of the end of the period, June 30, 2010,

 

there were 604,687 shares available for repurchase under this program.

 

 

 

 

 ITEM 10.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

 

There have been no material changes to the procedures by which shareholders may

recommend nominees to the registrant's  Board of Directors as set forth in the

registrant's Proxy Statement, dated February 22, 2010.

 

ITEM 11. CONTROLS AND PROCEDURES.

 

Conclusions of principal officers concerning controls and procedures

 

(a) As of June 30, 2010, an evaluation was performed  under the  supervision and with  the  participation  of the  officers  of  General  American  Investors Company,  Inc. (the  "Registrant"),  including the principal  executive  officer ("PEO") and principal  financial officer ("PFO"), to assess the effectiveness of the Registrant's  disclosure controls and procedures.  Based on that evaluation, the  Registrant's  officers,  including the PEO and PFO,  concluded  that, as of June 30, 2010, the  Registrant's  disclosure  controls and  procedures  were reasonably  designed  so as to  ensure:  (1)  that  information  required  to be disclosed  by the  Registrant  on  Form  N-CSR   is  recorded, processed,  summarized  and reported  within the time  periods  specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information  relating  to the  Registrant  is made  known  to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure.

 

(b) There have been no significant changes in the Registrant's internal control

over financial reporting  (as defined in Rule  30a-3(d)  under the  Investment

Company Act of 1940 (17 CFR 270.30a-3(d))  that occurred during the Registrant's

last fiscal quarter that has  materially  affected,  or is reasonably  likely to

materially affect, the Registrant's internal control over financial reporting.

 

ITEM 12. EXHIBITS

 

(a)(1) The code of ethics  disclosure  required by Item 2 is not  applicable  to

this semi-annual report.

 

(a)(2)  Certifications  of the  principal  executive  officer and the  principal

financial officer pursuant to Rule 30a-2(a)under the Investment Company Act of

1940.

 

(a)(3) There were no written  solicitations  to purchase  securities  under Rule

23c-1 under the Investment  Company Act of 1940 during the period covered by the

report.

 

(b)  Certifications  of  the  principal  executive  officer  and  the  principal

financial officer, as required by Rule 30a-2(b) under the Investment Company Act

of 1940.

 

 

 

 

 

SIGNATURES

 

  Pursuant to the requirements of the Securities Exchange Act of 1934 and

the Investment Company Act of 1940, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

 

General American Investors Company, Inc.

 

By:      /s/Eugene S. Stark

Eugene S. Stark

Vice-President, Administration

 

Date: August 3, 2010

 

  Pursuant to the requirements of the Securities Exchange Act of 1934 and

the Investment Company Act of 1940, this report has been signed below by the

following persons on behalf of the registrant and in the capacities and on the

dates indicated.

 

By:      /s/Spencer Davidson

            Spencer Davidson

Chairman, President and Chief Executive Officer

(Principal Executive Officer)

 

Date: August 3, 2010

 

By:      /s/Eugene S. Stark

Eugene S. Stark

Vice-President, Administration

(Principal Financial Officer)

 

Date: August 3, 2010